Confidence of firms linked to the energy sector
The Bank of Canada says while plummeting oil prices have darkened the confidence of firms linked to the energy sector, Canadian businesses overall see brighter days ahead.
The central bank's latest business outlook survey, released Monday, found companies in energy-rich Western Canada planned to reduce their investments in equipment and hiring following the oil-price collapse.
On the other hand, Eastern and Central Canadian companies said they were planning to invest more, particularly in the manufacturing industry.
"Although the balance of opinion on future sales growth declined sharply, it remains positive, indicating that, overall, firms continue to expect a modest further acceleration in sales over the next 12 months," the Bank of Canada said in its analysis of the survey results.
"Firms located in the Prairies or linked to the energy sector, however, anticipate a moderation in the pace of sales growth in the wake of falling oil prices."
BMO Capital Markets senior economist Benjamin Reitzes noted the survey showed the net percentage of firms expecting higher sales growth over the coming year fell 27 percentage points — to eight per cent.